Buying and Selling Homes in Sellers Market
Buying and Selling Homes in a Sellers Market
There are many factors involved in defining a real estate market as a home seller’s market. The level of inventory normally tops the list to identify a market as buyer’s or seller’s market. As per the rules of supply and demand, a low inventory is a sign of the home sellers’ Market, while more inventory or more supplies are always more advantageous to the home buyers. Whether buying a home or selling a home in Port St Lucie get a fresh real estate market report.
Currently the Florida real estate market, as many other markets in the nation, is considered to be a seller’s market. The historically low-interest rates of below 4%, low prices of existing and new construction homes along with the decrease in inventory have contributed to the creation of a sellers’ market.
Now, the question remains is how to approach and make a deal in a sellers’ real estate market when competing with many other qualified buyers for the same property. To begin with, the buyers should utilize any and all tools available to stay abreast of any changes with the market and act accordingly. The timing is of the most importance and home buyers must act quickly when facing competition in purchasing the same property. The home purchasers also must stay on top of the market by identifying all new listings that come to the market, preferably before their competing home buyers gets their hands on it. This is another emphasis on the use of the right tools to search and find the right property at the right time.
While internet is the best tool available, in searching the real estate market for that ideal home, but in order to be exposed to the arrival of any new listings in Multiple Listing Services or MLS, one must conduct many searches on a daily basis. This becomes a tedious task especially when the home buyers have to comb through all previously searched listings and try to remember the old listings in order to find the newly listed properties. All that said, the solution is much simpler than one could imagine. This could be easily resolved by the MLS system and through some of the many tools that are offered exclusively to the Realtors. These tools are normally placed in the backend of the MLS programs and not accessible by the public.
One of the tools accessible by Realtors is the ability to program the MLS System to email a copy of any new listing to home buyers, and at times the home sellers. The new listings are emailed as soon as the listing is published in MLS. This puts the recipient of the emails in a superior playing field in comparison to home buyers who are randomly searching the internet for the new listings.
So, start by finding a Realtor and discuss all your wants and needs for purchasing a new home. Ask your Realtor to program the MLS system to email you the existing listings along with any future listings. All you need to do is to be on top of your emails, analyze all incoming listings and act quickly by asking your Realtor to arrange for a tour of all properties that falls within your criteria.
After locating the ideal home, there are a few crucial steps that could define the success or failure in purchasing a home in the sellers’ market. Your Realtor would help you to correctly price the home you wish to purchase. Unless the home is listed grossly above the fair market value, refrain from lowballin’. Always remember if the home is listed in MLS, most often it means that another Realtor has assisted the home seller in competitively pricing their home. This simply means that the seller of that home is well aware of the value of their property and most probably will not want to sell it for much less than that.
How to Place a Winning Offer When Buying a Home
Offering the asking price with less or no contingencies in the contract, quick closing, and good size down payment are some of the few factors that could entice any seller in choosing your offer over others. When it comes to the Bank Owned Properties or REO listings the home buyers often offer even more than the list price. This is mainly because the banks list the REO properties somewhat lower than the fair market value in order to take them out of their books as quickly as possible. The lower price also attracts more buyers and the home buyers often bid over the asking price to win the bidding war
Your real estate professional is the best source to help you to avoid overvaluing a property. Most often the seller approves an offer before other buyers had a chance to place theirs. So, act promptly when it comes to placing an offer. By not acting quickly, you are allowing the competition to enter the arena. Your offer, unless required otherwise by the sellers, is normally written by your Realtor on a uniform document that is approved by Florida Association of Realtors, FAR. Although this document is the same as the main purchase contract but usually it is referred to as an OFFER, which upon the sellers’ acceptance and signing this document becomes a CONTRACT.
While writing the offer/contract, your Realtor should go through every line-item in the form and advise you of the best strategy in writing such proposals to have the best chance to overcome the competition. The Realtors also should educate their clients if the possibility of facing a multiple offer situation and plan accordingly. Multiple offers are more commonly known to take place during the seller’s market. This is when a seller receives more than one offer, prior to the acceptance of any offer. In most cases, a knowledgeable Realtor who is representing the seller will notify all buyer’s agents of being in a multiple offer situation. The seller’s agent will set a date and time for buyer’s agents to submit their “Highest and Best Offers”. All such offers are presented to the seller and the buyer agent for the winning bidder to be notified accordingly.
Buying Home and Multiple Offer
If you have arrived in multiple offer situations the first step is to get advice from your Realtor about the true fair market value of the property. Do not get tangled in a bidding war and overpay for a property, but at the same time remember in a market that prices are increasing rapidly sometimes the over pricing would be justifies within few months.
After sellers accepts your offer and signs the offer document now you have a valid contract to purchase the property. Your Realtor’s work enters a new phase that consist of scheduling and following up with inspection, appraisal and timely deposit of any and all additional funds that are stipulated in the contract. While your Realtor is the best source in hiring of an inspection company, your mortgage broker and the finance company are normally in charge of ordering the appraisal process.
It is not uncommon to have appraisal issues during the sellers’ market. This is due to the homebuyer’s eagerness to pay above the fair market value, which falls in direct conflict with the appraisal task in evaluating the property as closer to the fair market value as possible. The remedies for resolving appraisal issues remain in willingness of either party in adjusting their prices. This normally concludes in seller reducing their price, buyer paying out of pocket in addition to what financial companies will pay or in some instance the falling apart of the entire deal.